THE CASE FOR CONSOLIDATING FAR EAST PROCUREMENT FOR AN ELECTRICAL EQUIPMENT IMPORTING COMPANY IN SOUTH AFRICA

Abstract

Chinese trade in Africa is affecting business trade, specifically in South Africa. Chinese businesses are well established in Africa, indicating a strong interdependency between the countries. Chinese products are making inroads in the South African trade market. Within the electrical trade this has led to Chinese trade being more lucrative and competitive than local trade. This trade indicates that there are cost savings inherent in using a consolidated Freight Forwarder / Clearing Agent. (Freight Forwarder / Clearing Agent are used interchangeably to each other therefore Freight Forwarder will be used for the remainder of this Study). This study suggests that consolidating procurement as well as using a single Freight Forwarder is beneficial for imports. The primary research was gathered by means of quantitative questions which were sent out to specific purchasing divisions within the various subsidiaries. Quantitative questions were also used to evaluate the Freight Forwarders. This non-probability sampling technique showed that there was benefit derived from using a consolidated Freight Forwarder. This research also showed benefits that could be utilised by using another procurement division to source products. Secondary research on China and procurement was gained from internet research, reviews, books and journal articles. China is a key trading partner in Africa which suggests benefits of a single Freight Forwarder and procurement division. The Group needs to look into implementing a single Freight Forwarder as the research has shown it to be beneficial. It also needs to look into better Chinese supplier relations and trade enhancements as a group.